Housing Risk and Its Influence on House Price: An Expected Utility Approach

Table 5

Key values used in the simulations.

Parameter	Interpretation	Value	Rationale
g_initial	Initial real house price	35.593	Sample average (Table 1)
HS_cons	Housing sold area (000s)	5546	National sample average
RC_cons	Real consumption (million)	10412	National sample average
RY_initial	Initial real income	142	Sample average (Table 1)
rry_cons	Growth rate of real income	0.0776	Sample average (Table 1)
std_rry_cons	Standard deviation of rry	0.0807	Sample average (Table 1)
interest_cons	Nominal interest rate	0.0525	Sample average (Table 1)
inf_cons	Inflation rate	0.0248	Sample average (Table 1)
dep_cons	Housing depreciation rate	0.01	See text